Student loan forgiveness: Biden administration move for disabled borrowers was ‘the bare minimum,’ advocacy group says

This story has been updated to include a comment from the Department of Education.
Stakeholders are calling on the Department of Education (ED) to cancel $ 8 billion in student debt held by nearly 518,000 borrowers who are completely and permanently disabled.
The groups sent a letter to Education Minister Miguel Cardona Friday morning, stating that the ministry's existing regulations "unnecessarily prevent qualified borrowers from accessing and maintaining loan cancellation".
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The groups also urged ED to amend Total and Permanent Disability (TPD) regulations "to automatically settle debts for all known eligible student borrowers with total and permanent disability".
ED recently paid off student debts for 41,000 borrowers who had previously been granted debt relief but had their loans resumed amid the pandemic. ED also skipped paperwork for an additional 190,000 borrowers.
"When they announced that they were making a big announcement about TPD, we thought there was something useful," said Alex Elson, senior counsel at the National Student Legal Defense Network, one of the groups sending the letter told Yahoo Finance, "And that 40,000 announcement was really just the bare minimum - on the sidelines."
In response to the story, an ED spokesperson told Yahoo Finance that the agency was "in strong agreement with the need to make the full and permanent disability release program more efficient and useful for borrowers."
Reaffirming the action they had taken with the 41,000 borrowers, they added, "We recently announced plans to include full and permanent disability dismissals in our upcoming settlement and believe there is scope for additional action before this process is completed."
U.S. President Joe Biden walks along the promenade during the G7 Summit in Carbis Bay, Cornwall, South West England on June 11, 2021. (Photo by PHIL NOBLE / POOL / AFP)
In April 2021, according to a Freedom of Information Request (FOIA) filed by Student Defense and made available to Yahoo Finance, there have been approximately 818,000 student debtors with total and permanent disabilities as of 2016, identified by government agencies for debt relief.
Just over 300,000 of these student borrowers have paid off $ 8.8 billion in student debt since 2016, while nearly 518,000 borrowers - who hold $ 8 billion in debt - are still awaiting relief.
“It really is a farce that the US Department of Education knows of hundreds of thousands of disability borrowers who are entitled to have their federal student loans canceled, and yet it has not taken the necessary steps to provide borrowers with this vital relief. Persis Yu, director of the Student Loan Support Project at the National Consumer Law Center, told Yahoo Finance. "Many of these borrowers have defaulted on their loans and will be vulnerable to the department's tough collection tactics if the suspension ends when they shouldn't even owe the debt."
U.S. Vice President Kamala Harris and Secretary of Education Miguel Cardona chaired a roundtable on reducing child poverty at the Boys and Girls Club of New Haven on March 26, 2021 in New Haven, Connecticut. (Photo by Drew Angerer / Getty Images)
"It was really anathema to have resumed student loans during the pandemic"
Historically, federal borrowers with TPD can obtain debt relief through a process created by Congress in 1965.
Under a program set up by the Obama administration, the Social Security Administration (SSA) would determine borrowers' eligibility and they could apply for (or choose to) debt relief. If they are successful, they would be subject to a three year monitoring period.
Since the beginning of the SSA collaboration, 818,074 borrowers have been identified who are eligible for TPD relief. 300,405 have been granted $ 8.8 billion, but the process has stalled for 517,669 others.
"The ministry's bureaucracy prevents hundreds of thousands of borrowers with disabilities from receiving the facilities they are entitled to under the law," the new letter said. "If the rules are not changed and no relief is provided before the student loan payment freeze expires on September 30, 2021, these hundreds of thousands of borrowers will experience significant financial damage."
President Trump made the process even smoother for some when he signed an executive order in 2019 calling on ED to notify more than 25,000 veterans deemed eligible by Veterans Affairs to qualify for a full and permanent dismissal. The assignment also automated the process, and veterans are now not subject to the 3 year monitoring period.
US President Donald Trump issued an executive order to relieve qualified disabled veterans from federal student loan debt following his speech at the AMVETS (American Veterans) National Convention in Louisville, Kentucky. USA, August 21, 2019. REUTERS / Bryan Woolston
Elson noted with the Trump administration that "veterans were automatically granted debt relief, but that debt relief was never extended to ordinary citizens eligible for it under the Social Security Administration's reconciliation process."
Under ED's existing agreement with SSA, the 518,000 have been identified as those in the Medical Improvement Not Expected (MINE) category.
"The classification in the MINE category means that the person has a long-term, extremely work-restricting disability that is very unlikely to improve medically," says a study by the TPD program.
"The department has the list of people who are entitled to [discharge], but they're not giving it to them," Elson said.
Aarthi is a reporter for Yahoo Finance. She can be reached at Follow her on Twitter @aarthiswami.
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